Can Buns On Fire withhold approval of a franchisee's site location at its sole discretion?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall operate the Franchised Business from a location in the Protected Territory. Franchisee shall acquire or lease within ninety (90) days from the date of execution of this Agreement, an approved premises for the Franchised Business. The Franchisor shall have the right in its sole discretion, to require:
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- Franchisee to execute a Site Addendum Agreement in the form attached hereto;
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- Franchisee to conditionally assign such lease to the Franchisor (with the consent of the lessor, if required) by conditional lease assignment provisions in form annexed to Franchise Agreement as Exhibit "C" in order to secure performance of any and all of Franchisee's liabilities and obligations to the Franchisor; or
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, Buns On Fire has the right to approve or disapprove the franchisee's proposed business location. Specifically, the FDD states that the franchisee must select a location subject to the Franchisor's approval within 90 days of the agreement's effective date. Furthermore, Buns On Fire retains sole discretion to mandate that the franchisee execute a Site Addendum Agreement. They can also require the franchisee to conditionally assign the lease to Buns On Fire to secure the franchisee's obligations.
This means that while a franchisee may find a location they believe is suitable, Buns On Fire ultimately decides whether the location meets their criteria. This is a fairly standard practice in franchising, as the location's suitability can significantly impact the success of the franchise and the brand's reputation. The franchisee bears the responsibility of acquiring or leasing an approved premises within 90 days of the agreement.
Additionally, Buns On Fire can stipulate specific clauses in the lease agreement, such as the ability to assign the lease to SMYA Ventures LLC (or its designee) without the lessor's consent, access to sales data from the leased premises, and the right to receive notice of any default by the lessee (franchisee) with the option to cure such default. These stipulations provide Buns On Fire with significant control over the leased premises and the franchisee's operations, which is designed to protect their interests and ensure brand consistency.
If a franchisee wishes to modify or change the approved location, they must obtain prior written approval from Buns On Fire and meet certain conditions, including being current on all obligations and not being in default. If approved, the franchisee may be required to sign Buns On Fire's current form of the Franchise Agreement and pay a Relocation Fee of $2,500, potentially with different terms and conditions. This highlights the importance of selecting an appropriate initial location, as relocation can incur additional costs and legal obligations.